10-Q/APeriod: Q1 FY2003

SYNOPSYS INC Quarterly Report (Amendment) for Q1 Ended Jan 31, 2003

Filed July 9, 2003For Securities:SNPS

Summary

Synopsys, Inc. (SNPS) reported strong performance for the three months ended January 31, 2003, with total revenue increasing significantly by 53% year-over-year to $268.1 million. This growth was largely driven by the acquisition of Avant! Corporation in June 2002, which expanded the company's product offerings and contributed to increased revenue across all segments, particularly in Design Implementation and Design Analysis. Net income also saw a substantial rise, more than doubling to $34.4 million, leading to a significant improvement in basic earnings per share to $0.46. The company's balance sheet remains robust, with total cash and short-term investments growing to $470.3 million, indicating healthy liquidity. Management appears optimistic about the continued integration of acquired businesses and future growth prospects, although they acknowledge ongoing market challenges in the semiconductor industry.

Key Highlights

  • 1Total revenue surged by 53% to $268.1 million for the three months ended January 31, 2003, compared to the prior year, largely due to acquisitions.
  • 2Net income more than doubled to $34.4 million, up from $14.1 million in the same period last year.
  • 3Basic earnings per share increased to $0.46, a significant rise from $0.23 in the prior year.
  • 4The company successfully integrated several key acquisitions (Avant!, Co-Design, inSilicon) which contributed to revenue growth.
  • 5Cash and cash equivalents, along with short-term investments, grew to $470.3 million, demonstrating strong liquidity.
  • 6Adoption of SFAS 142 has ceased goodwill amortization, positively impacting reported net income.
  • 7The company announced a cash tender offer to acquire Numerical Technologies, Inc. for approximately $240 million, signaling continued strategic growth initiatives.

Frequently Asked Questions

The significant 53% year-over-year increase in total revenue to $268.1 million was primarily driven by the successful integration of the Avant! Corporation acquisition in June 2002. This acquisition expanded Synopsys' product portfolio, particularly in areas like physical design and verification, contributing to revenue growth across multiple product segments, including Design Implementation and Design Analysis. The continued adoption of the Technology Subscription License (TSL) model also played a role in layering revenue over time.

The acquisitions, particularly Avant!, significantly boosted Synopsys' profitability. Net income more than doubled to $34.4 million from $14.1 million in the prior year's comparable quarter. This improvement was also supported by the adoption of SFAS 142, which eliminated goodwill amortization, further enhancing net income. Earnings per share saw a substantial increase to $0.46 from $0.23.

Synopsys' financial position remains strong. The company reported total assets of $2.02 billion and total stockholders' equity of $1.19 billion as of January 31, 2003. Liquidity is robust, with cash and cash equivalents and short-term investments totaling $470.3 million, an increase from $414.7 million at the end of the previous fiscal year. Operating activities generated $31.5 million in cash during the quarter.

Yes, Synopsys announced a cash tender offer to acquire Numerical Technologies, Inc. for approximately $240 million. This acquisition is intended to expand the company's offerings in design-for-manufacturing products, indicating a continued strategy of growth through acquisitions to enhance its product suite.